What do you need to know on your property tax bill?

I would recommend everyone to check the property tax bill when it comes every year and make sure you are getting all the exemptions you are eligible for.  Below are the different kinds of exemptions on the property tax bill.

Homestead Exemption AKA Homeowners Exemption

If you own and occupy your home as your principal place of residence, you may be eligible to claim an exemption of Certain amount (amount can be varied to county) from the assessed value.  If you didn’t see any amount on the homeowner’s exemption column on the property tax bill, contact the county and apply for the exemption.

You don’t need to apply every year and county assessor's office, normally consider the property as a personal residence until you change the residency or ownership. If you change either the ownership or residency, you should let the county and remove the homeowner’s exemption.  You are not allowed to claim the homeowner’s exemption more than one property at a time.

In general, Real Estate Attorney fill the application for the homeowner’s exemption at the time of closing and it’s a great idea to check with an attorney at the time closing about this exemption to avoid any delay in getting the exemption

Senior Exemptions

If you are above 65, you may elect to get an additional exemption (Age can be different for each state and check with county for the required age in the state you live)

Senior Freeze Exemption

In addition to the Senior Exemptions, you may eligible for Senior Freeze exemption too if your income is less than $65K (Income limit can be varied by county)

Disabled Veterans Exemption

Disabled veterans may elect to get an exemption based on the % of the disability and if you are coming under this category, please contact the county and make sure you are getting this exemption

Homestead Exemption for Persons with Disabilities

The homeowner with a disability may eligible for this exemption and need to apply with proof of disability to the Chief County Assessment Office and may need to renew every year.

Home Improvement Exemption

You may able to get the home improvement exemption for a total of 4 years from the date of completion of the home remodel.  Remodel such as basement finishing, adding an additional room, etc. can be qualified for the home improvement exemption and the maximum deduction is limited to $25,000 of assessed value

“Check with your Accountant”

Can we replace the Accountant with Payroll Software?

Some of the starters are thinking they can get the software to run the payroll and eliminate the need of an Accountant and they can use an accountant to do the tax return at the end. If you are very knowledgeable and experienced, yes it may help.

Most of the online software will cost an average of $60 per month and some of the banks even offer at lower than this rate. But none of the software or the payroll company can give you advice on any of the tax-related questions. If you ask anything to connect with tax, they will be advised you to check with your accountant. If you ask the same questions to your financial advisor or even to the IRS, they will say the same “Check with your Accountant”

What doesn’t mean “Check with your Accountant” and why can’t they answer your questions Because they are not authorized to give you tax advice. In order to give you Advice, that person must have an Authority or certificate from the government. That means those payroll service providers are not qualified, well I can’t answer that question and you should ask them why you can’t give the answers if you have enough experience.

Each business is unique, and the answers can be different for business to business and person to person and that’s why the experienced business owners always use an Accounting firm to do the payroll instead of an online software company. You will need proper guidance not only in the tax return but also needed in the payroll, which only an Accountant can provide

For any business, every penny is controlled, and I strongly agreed to control the expense and the question is which expense can be control and which should not. It depends on the type of business you are doing.

If you are doing a business where your client won’t need to meet you in person, you may not need an outside office until you grow. You may able to hire a virtual office space (which costs around $50 a month) and run from your home. Some of the expense like marketing can’t be eliminated.

Most of the starters pay an average $60 per month for payroll and which will cost at least $720 a year and anywhere from $500 to $1500 to prepare the corporate tax return at the year-end. If they need to make any amendment to the Payroll tax forms, you need to pay again to the payroll software company or hire an accountant to fix the issue.

Our company formed in 2002 and have enough experience in small business payroll and accounting and our fees are fixed and affordable to any small business. Please visit our website for more information on our fee schedule

Our accounting package ( Payroll and Corporate Tax Return) starting at $85 per month for one State and up to 5  Employees and/or contractors and when you complete the full year of payroll service you are eligible to get a Free Corporate Tax Return (Normally charged $250- $750 ) and one Free business consultation (Normally charged $250 - $500). Yes, that is correct $1020 a year can cover all the tax and accounting costs for your small business. For more information please contact us at 630-663-1500

Tax Due date is April 15th and we paid all the tax on the last day and why are we still getting a bill?

So many taxpayers get a letter from internal revenue service this year asking them to pay some additional tax and interest. Most of them never have this situation before and like to know what is underpayment penalty  and how to avoid this for next year

Underpayment penalty

You must pay at least 90% of the tax you owed for the current year or 110 % of the last year tax, what ever is smaller before December 31^st on a timely manner. 

How do I avoid this for next year?

Its very hard to find out what is 90% of current year until we do the tax, but it is very easy to calculate the 110% of last year tax liability.

If you are employed/Salaried person its very easy to adjust the withholding tax by submitting a proper W4 and if you are not sure what is the correct number of exemptions, get your accountant help and if you are expecting any additional income like bonus, Third party sick pay etc. make sure the employer deduct enough tax from the paycheck

We always noticed that most of the third-party sick pay and unemployment benefits are not deducting no tax or very less tax. We would recommend keeping the same or more income tax deduction on these payments to avoid the big tax bill at the end.

If you are self employed person, its little hard to find out what will be your taxable income unless otherwise you use a professional to keep your books. If you are running a small business, I would recommend using our bookkeeping service to maintain your books Update all the time.

Bookkeepers will go thru your business bank statements and prepare the Profit and loss statement, Balance Sheet and Bank reconciliation on a monthly basis and that will help you to make the estimated payment of income tax to the IRS and State

Our Bookkeeping service starting $75 a month depends on how much transactions a month to enter and please call 630-663-1500 X 5 for more information

October 2013 Newsletter

                         How will the Affordable Care Act “Obamacare” Impact you?

The Affordable Care Act contains new health insurance coverage and financial assistance options for individuals and families, it also contains new benefits and responsibilities for employers.  In 2014 most people will have to have health insurance or pay a fee.  The Health Insurance Marketplace found at www.healthcare.gov helps uninsured people find health insurance.  Open enrollment for the Marketplace ends on March 31, 2014 and if you enroll by December 15, 2013, your coverage can begin as soon as January 1, 2014.  When you fill out an application at the Marketplace you will find out what you qualify for including private insurance plans, Medicaid, and the Children's Health Insurance Program (CHIP).

 

  The IRS will be administering the tax provisions.  There is a premium tax credit that may help make the cost of purchasing health insurance coverage.  In January of 2014 you must either have health care coverage, have an exemption from coverage, or make a payment when you file your 2014 tax return in 2015. If you do not have health insurance in 2014 you will pay a penalty of $95.00 per adult, $47.50 per child, or 1% of your income (whichever is greater).  

  If you are a business owner, depending on the size of your business will determine if you are eligible for tax credits, health care options, and your responsibilities as a business owner.  If you have less than 25 full-time equivalent employees may be eligible for a Small Business Tax Credit to help cover the cost of providing coverage.

  All information in regards to the Affordable Care Act was found at www.healthcare.gov or www.irs.gov.

November Newsletter: IRS Scam Alert

The IRS is warning people about a phone scam targeting taxpayers, including recent immigrants, throughout the country.  Victims are receiving phone calls saying that they owe money to the IRS and it must be paid immediately via wire transfer or a pre-loaded debit card.  If the victim does not pay, they tell the victim they will be arrested, deported, or will have their business or driver’s license suspended. 

The IRS will not ask for credit card numbers over the phone, or a pre-paid debit card or a wire transfer.  This scam has been happening in every state.  The IRS will first contact people via mail, they will not call and demand payment over the phone.   These scammers use fake names and IRS badge numbers, have the victim recite last four of their Social Security Number, have a spoof IRS toll-free number, send bogus emails, victims also hear background noise to mimic a call site.  If a victim refuses to pay the scammers will also call back pretending to be from the police, or DMV and will have a spoof caller ID to appear valid.

            If you receive one of these calls and you think you owe taxes call the IRS at 800-829-1040.  If you receive one of these calls and you do not think you owe taxes please call 800-366-4484.   You can also contact the Federal Trade Commission at FTC.gov to report this scam.

            Please remember the IRS will not contact via electronic communication, including email and text messages to request personal or financial information.   If you receive this type of communication do not open any attachments, and forward it to phishing@irs.gov.

            All information in regards to this scam was found on the IRS.gov website.

October Newsletter Details: How will the Affordable Care Act impact you?

The Affordable Care Act contains new health insurance coverage and financial assistance options for individuals and families, it also contains new benefits and responsibilities for employers.  In 2014 most people will have to have health insurance or pay a fee.  The Health Insurance Marketplace found at www.healthcare.gov helps uninsured people find health insurance.  Open enrollment for the Marketplace ends on March 31, 2014 and if you enroll by December 15, 2013, your coverage can begin as soon as January 1, 2014.  You will be considered covered if you are insured through an employer, an insurance plan bought on your own, Medicare, Medicaid, CHIP, COBRA, retiree coverage, TRICARE, or VA health coverage.

On the Marketplace website when you complete an application you will find out what you qualify for including private insurance plans, Medicaid, and the Children's Health Insurance Program (CHIP).  The Marketplace will tell you if you qualify for lower costs based on your household size and income.  Plans cover essential health benefits, pre-existing conditions, and preventive care.  If you do not qualify for lower prices you can still buy insurance at the standard price on the Marketplace website.   If you qualify for Medicaid or the Children’s Health Insurance Program (CHIP), the Marketplace will share that information with your state agency, many states are expanding Medicaid to cover more people in 2014.   If you are eligible for insurance through an employer you have the option to switch to a marketplace plan, however you will not qualify for lower costs based on your income unless the job-based insurance is not affordable or does not meet the minimum requirements.

The IRS will be administering the tax provisions.  There is a premium tax credit that may help make the cost of purchasing health insurance coverage.  In January of 2014, you must either have health care coverage, have an exemption from coverage, or make a payment when you file your 2014 tax return in 2015. If you do not have health insurance in 2014 you will pay a penalty of $95.00 per adult, $47.50 per child, or 1% of your income (whichever is greater). This fee is called the Individual Shared responsibility payment and these fees will increase every year, these fees will be due when you make your tax payment.  You may qualify for an exemption from paying the fee, there is a list on the Marketplace website, some of them include: if you were uninsured for less than 3 months of the year, the lowest-priced coverage available to you would cost more than 8% of your household income, you don’t file a tax return because your income is too low and different types of hardships that may have affected your ability to purchase an insurance plan.  You can apply for an exemption on the Marketplace website or when you file your 2014 federal tax return. If you get insurance through the Marketplace you may be able to claim a premium tax credit, which you can have advance payments sent directly to your insurer during 2014 or you can claim them when you file your tax returns.  If you choose payments in advance you will have to reconcile the payments on your 2014 tax return.

If you are a business owner, depending on the size of your business will determine if you are eligible for tax credits, health care options, and your responsibilities as a business owner.  If you have less than 25 full-time equivalent employees may be eligible for a Small Business Tax Credit to help cover the cost of providing coverage.  If you have less than 50 employees you might be eligible to buy coverage through the Small Business Health Options Program.  If you have 50 or more employees an annual return will need to be completed to state what insurance was offered their employees and they may also be subject to the Employer Shared Responsibility provisions.

All information in regards to the Affordable Care Act was found at www.healthcare.gov or www.irs.gov.

Role of Accountant in your small business

 It is very important for you to understand the role accountants play in the success of today’s small business?

Even with the best tax software, without being an expert on accounting, tax, and finance, you need an accountant. A professional accountant is well trained and should be able to help you save money as well as add value to your starting or existing business.

Our Monthly service Charge starts from $85 and which includes the payroll, quarterly tax returns, annual tax return, and tax consultation. Our payroll service includes direct deposit, online access to the payroll records, paystubs as pdf in the email, E-Payment and E-filing the payroll tax and reports, Payroll Audit, and Insurance Audit. When you use our monthly accounting service, $1020 a year will cover all the accounting, Payroll, and year-end corporate tax returns.


If you are not using our monthly service, you will be charged $250 for each consultation by phone, email or in person and $250 for the annual tax return preparation. Most of the business owners contact their accountant at least 4 times a year and which will cost $1000 plus the annual tax return fee and the payroll software charges


If you have not yet set up your business, find out the role accountants play and endeavor to talk to an accountant before you start. All businesses have to produce annual accounts for the tax preparation Most jurisdictions have a threshold or guidelines, for which kind of business qualifies for audit exemption.   Whatever form (Corp, S Corp, LLC) your business is going to take; business accountants can offer you a range of valuable services.


The accountant can advise you on how to start your business.

· What form your business should take — sole trader, partnership, limited liability partnership or limited company.

· The role accountant play involves assisting with your business plan.

· Assist you with the Legal and tax aspects of registering your new small business

· Professional accountants will provide all the accounting and book-keeping expertise you need including :

· The setting-up of manual or computerized book-keeping systems — sales ledger, purchase ledger, cash book, petty cash book, debtors ledger, creditors ledger, fixed-asset register.

· The preparation of financial statements — profit and loss account, balance sheet, cash flow statement and related notes.

· Tax returns and corporation tax, VAT, PAYE, and National Insurance contributions, and income tax for sole traders and partnerships.

· Tax planning — minimizing your tax bill.

They can give you general financial advice.

· This may include recommendations on the financing of your business through overdrafts, loans, leasing, hire purchase, factoring, venture capital (including business angels) or grants.

· They can be instrumental at advising and introducing you to viable sources of finance and also help with drafting and presenting your business case to them.

The role accountants play towards the success of your small business or personal financial planning can only be compared to a doctor-patient relationship.



If you like to start your monthly accounting service from us please give us a call @ 630-663-1500